June 14 hearing of Najib, son’s tax-linked apex court appeal

The apex court has rescheduled to June 14 the hearing of an appeal by former prime minister Najib Abdul Razak and his son Mohd Nazifuddin to quash a tax-related summary judgment against them.

The duo’s counsel Wee Yeong Kang confirmed with Malaysiakini that the Federal Court has vacated the previously set hearing date on March 13.

“During case management today before deputy registrar Suhaila Haron, the Federal Court rescheduled the hearing date to June 14.

“The hearing would be conducted via zoom,” the lawyer said.

Senior revenue counsel Al-Hummidallah Idrus, Ainur Mardhiah Ramli and Qhistina Mohd Apandi appeared for the government, which is the respondent in the appeal.

The summary judgment, issued by the Kuala Lumpur High Court in 2020, allowed the Inland Revenue Board’s (IRB) civil action to seek RM1.69 billion and RM37.6 million from Najib and his son respectively, while dispensing with the need to consider the duo’s defence against the suit.

However, there is an existing apex court order to stay this summary judgment, pending disposal of the duo’s appeal before the Federal Court.

The duo’s appeal basically seeks for them to quash the summary judgment and be allowed to present their defence against the tax suits.

Najib and Nazifuddin failed in an earlier appeal before the Court of Appeal on Sept 9, 2021 to reverse the summary judgment.

Central issue

The bankruptcy proceedings, commenced by IRB against Najib and Nazifuddin before the Kuala Lumpur High Court, are also currently stayed, pending disposal of the duo’s main appeal.

One central issue in the appeal is whether Section 106(3) of the Income Tax Act 1967 (ITA) is invalid for contravening Article 121 of the Federal Constitution.

Section 106, in general, empowers the IRB to institute a civil action in court to recover tax arrears and penalties from taxpayers.

Section 106(3) specifically states that in relation to IRB’s civil action to recover taxes, the court “shall not entertain any plea that the amount of tax sought to be recovered is excessive, incorrectly assessed, under appeal or incorrectly increased”.

Article 121 is in relation to the powers of the judiciary in Malaysia.

In their appeals, Najib and Nazifuddin’s legal team contended that Section 106(3) is unconstitutional as it takes away the court’s power (as per Article 121) to consider the defence of a taxpayer against the IRB’s civil actions to recover the tax. - Mkini